Did you know that you can get a tax credit of up to 50% for expenditures made during 2016 on equipment that is accessible to disabled individuals? Many clinics and practitioners that we speak to have made such expenditures without realizing that these investments can significantly reduce their income tax liability.
Under Internal Revenue Code, Section 44, an income tax credit (not just a deduction) of up to $5,000 is available to qualifying businesses** for costs incurred during 2016 for equipment purchased during 2016 that is accessible to disabled users.
Wheelchair accessible equipment, including the Core Stix One Therapy Package, is eligible for a $1,122.50 tax credit for each package purchased, saving qualifying clinics thousands of dollars in income taxes and effectively reducing the cost of this package to $1,372.50.
The best part is, our Core Stix One packages are universally designed for any user. So, all of your patients and clients will get incredible use out of it.
What other expenditures are eligible under IRS Section 44? Costs relating to barrier removal in their facilities (except for costs incurred during new construction), such as widening a doorway or installing a ramp, provision of accessibility services (e.g., sign language interpreters), and provision of printed material in alternate formats (e.g., large-print, audio, Braille).
**A qualifying business is one that, for the previous tax year, had either revenues of $1,000,000 or less or 30 or fewer full-time workers. Either one of these will qualify a business for this Section 44 tax credit.
The amount of the tax credit is equal to 50% of the eligible access expenditures in a year, up to a maximum expenditure of $10,250. There is no credit for the first $250 of expenditures. The maximum tax credit, therefore, is $5,000.
Please click here for more detailed ADA information regarding the tax deduction and tax credit.
Please click here for the ADA tax form for claiming your ADA Tax Credit.
IRS Section 179 Deductions:
You can deduct the full purchase price of therapy equipment (now, up to $500,000) from your clinic’s or practice’s gross income under IRS Section 179! This also applies to the purchase of off-the-shelf software.
** Special Update **
The deduction limits have recently been changed for all 2015 qualifying equipment – up from $25,000 to $500,000!
What has changed?
- The deduction limit for Section 179 is now $500,000 – up from the previous limit of $25,000. • The 2015 Section 179 deduction threshold for total amount of equipment that can be purchased is now $2,000,000. The old limit was $200,000. • This means that you can purchase more equipment and still have the benefit of the Section 179 deduction. • 50% bonus depreciation has been reinstated for the tax year 2015 and extended through 2019. • For equipment purchases over the Section 179 deduction of $500,000, you can deduct an additional 50% of the amount over $500,000 in addition to your standard depreciation deduction. This applies to equipment acquired and put into service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40% in 2018 and 30% in 2019. The old limit was $0.00. • This can have a DRAMATIC effect on tax savings and, in essence, DRASTICALLY reduce the overall cost of equipment purchases while buying equipment to keep your clinic’s competitive edge.
How much can you save? Click here to use the quick and easy calculator.
Want more information? Click here for more information about the IRS Section 179 tax savings.
Note that the tax deduction applies to the year that the purchased equipment or software is put into service. Equipment put into service during 2016 should apply to reduce your taxes for 2016.
Please note that we are not tax advisors. Please verify eligibility with your tax advisor.